Question

Jack and Jill need to save $6100 toward a new car. How long will it take them if they save $200 a month earning interest at 4.7% per year

Answer 1

2 years 5 months.

Step-by-step explanation:

Use the Time Value of Money techniques to find n (period it takes to save for required amount)

Using a financial calculator enter the following data

Fv = $6,100

Pmt = - $ 200 × 12 = - $2,400

P/y = 1

r = 4.7 %

Pv = 0

n = 2.4569

Thus it takes 2 years 5 months to save $6100 toward a new car under the given circumstances.